In an effort to understand transcriptional regulation by the peroxisome proliferator-activated receptor gamma (PPARgamma), we have investigated its potential interaction with coregulators and have identified ARA70 as a ligand-enhanced coactivator. ARA70 was initially described as a coactivator for the androgen receptor (AR) and is expressed in a range of tissues including adipose tissue (Yeh, S., and Chang, C. (1996) Proc. Natl. Acad. Sci. U. S. A. 93, 5517-5521). Here we show that ARA70 and PPARgamma specifically interact by coimmunoprecipitation and in a mammalian two-hybrid assay. PPARgamma and ARA70 interact in the absence of the PPARgamma ligand 15-deoxy-Delta12,14-prostaglandin J2, although the addition of exogenous ligand enhances this interaction. Similarly, in transient transfection of DU145 cells, cotransfection of PPARgamma and ARA70 induces transcription from reporter constructs driven by either three copies of an isolated PPAR response element or the natural promoter of the adipocyte fatty acid-binding protein 2 in the absence of exogenous 15-deoxy-Delta12,14-prostaglandin J2. However, this PPARgamma-ARA70 transactivation is enhanced by the addition of ligand. Thus, ARA70 can function as a ligand-enhanced coactivator of PPARgamma. Finally, we show that AR can squelch PPARgamma-ARA70 transactivation, which suggests that cross-talk may occur between PPARgamma- and AR-mediated responses in adipocytes.